TOT compensations claims depress Thai telecoms

TOT Plc, the state-run telephone company, has announced plans to seek damages of 214 billion baht (US$7 billion) from Thai telecom operators for alleged unpaid access charges and losses from changes made by past governments.

The announcement immediately depressed telecoms stock on the Stock Exchange of Thailand and pushed down the exchange, even though other regional markets showed gains. Mobile operator Advanced Info Service was hit yesterday with a claim for 74 billion baht for unpaid compensation following the illegal amendments to its concession with TOT during the Thaksin Shinawatra government.

Thaksin, who founded AIS and the parent telecom conglomerate Shin Corp, was found by the Supreme Court in February 2010 to have abused his power by approving the use of an excise tax on telecom services to reduce revenue-sharing concession payments, as well as allowing the amendment of concessions that ultimately reduced payments to state-owned TOT.

Two fixed-line telephone operators, True Corp and TT&T, will also be subject to demands for compensation. TOT is also seeking payments of 138.6 billion baht from Dtac, Thailand's second-largest mobile operator, True Move, Digital Phone and state-owned CAT Telecom for what it claims are unpaid access charges for the use of its network.

A TOT spokesman said the claims were being made to protect the interests of the public. However, observers noted that the case could take years to resolve in arbitration and in Thailand's rather slow court system.

Observers said the access charge payments demanded by TOT from True and DTAC, the second-largest telecoms operator, were three times higher than that calculated by the companies themselves. In a separate move, Total Access Communication (DTAC) is threatening legal action of its own against CAT Telecom for what it considers unfair treatment in the recent deal with its rival True Move.

Tore Johnsen, DTAC's chief executive, said yesterday that his company had twice submitted letters to CAT requesting clarification before a contract between CAT, another state agency, and True Move was signed last Thursday for CDMA service operations and the right to provide 3G wireless broadband service via high-speed packet access technology.

The letters questioned whether a deal with True Move would be fair to the other private mobile operators. No response has been received.

Thailand's Information and Technology Ministry will report back to the Thai Cabinet in 15 days following negotiations with the companies.